Tesla Faces Major Setback In Texas, Direct Car Sale Restricted Until 2017

Tesla Faces Major Setback In Texas, Direct Car Sale Restricted Until 2017
Tesla Model S Maurizio Pesce/Flickr CC BY 2.0

Tesla has lost a political battle in Texas to sell cars directly to the consumers. The company that was used to selling cars directly apart from manufacturing them will not be able to do so in Texas until 2017.


Two separate bills were presented to the Texas State Legislature regarding car sales in Texas, but the authority failed to vote on them. The car manufacturing company will have to wait for two more years in order to get the voting done.

Bloomberg reported on May 29 that this is the second time Elon Musk, the CEO of Tesla, is shown the door as far as direct sales are concerned. The company was excited about selling electric cars ranging around $100,000, but now it is not possible. Musk had hired 20 lobbyists and spent $150,000 in Texas to support the campaign but everything went in vain.

Diarmuid O’Connell, vice president of business development for Tesla was reported as saying, “That it doesn’t even get a fair hearing — much less a vote — is to me very odd and disturbing.”

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Texas already has a law that guards interest of dealers and prohibits companies from direct sales. The bills were to bypass the same. There are some more states with the same kind of legislation. Arizona, West Virginia, and Connecticut were some of them.

According to Engadget, the dealership is quite important as that generates employment and sponsorship. Though the change in law could be beneficial for the environment as well as competition, the end of dealership models may cause some severe changes in the economy. The rejection was not that surprising.

As reported earlier, the deadline was already missed for the Tesla bills to be passed. With the session ending on June 1, that narrow chance is also gone.